GBP/USD in search of a firm direction, stuck in a range below 1.2700 handle

   •  The USD remains on the defensive amid increasing Fed rate cut bets.
   •  The UK political and Brexit uncertainties seemed to cap the upside.

The GBP/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Thursday.

The pair stalled its recent recovery move from multi-month lows and started retreating from the 1.2745-50 supply zone on Wednesday amid a goodish intraday US Dollar rebound following the release of upbeat US ISM non-manufacturing PMI.

The greenback failed to capitalize on the overnight uptick and held on the defensive in the wake of firming expectations that the Fed will eventually cut interest rates in 2019, which was seen as one of the key factors lending some support to the major.

However, the fact that Boris Johnson is seen as the favourite candidate to be the next British PM, fears that a pro-Brexit hardliner might lead to a no-deal split held investors from placing any aggressive bids and kept a lid on any meaningful up-move. 

In absence of any fresh UK political or Brexit headlines and relatively thin economic docket - featuring second-tier releases from the US, it would be prudent to wait for a decisive break in either direction before traders start positioning for any meaningful intraday move.

Technical levels to watch